Written by Cláudio Afonso | LinkedIn | X
A few days before the release of the second-quarter delivery numbers, Cantor Fitzgerald published a new research note on the Vietnamese electric vehicle (EV) manufacturer VinFast reiterating its price target of $8.
Cantor’s analyst Andres Sheppard lowered the firm’s delivery estimate for the quarter from 12,022 to 10,502 units including the company’s electric buses. The global EV sales during the first quarter of the year amounted to 9,689 units.
“For Q2, we are lowering our delivery estimate to 10,502 (including E-buses), vs. our prior estimate of 12,022, as we expect a weaker quarter. This results in a reduction in Q2 revenue to $305M (from $344.7M previously),” Sheppard wrote adding that the firm’s 2024 “delivery estimates and FY24 revenue estimates are unchanged”.
“We arrive at our $8 PT via a 10-year bottom-up Discounted Cash Flow (DCF). In our model, we assume an 11 percent Weighted Average Cost of Capital (WACC) and a terminal value with a 2 percent long-term growth rate,” he wrote.
VinFast shares closed 2.27 percent lower on Friday at $4.30 per share indicating that the price target implies an upside potential of 86 percent.
However, the analyst mentioned that key risks include “continued industry supply chain disruptions, manufacturing constraints, high cost of goods sold, highly competitive market” beside a “slower-than-expected customer adoption in key markets like North America, India, and Indonesia”.
The company has been accelerating its global expansion as it prepares for the opening of two new factories in India and Indonesia.
Additionally, the Indonesian plant will break ground within the next two months, targeting production by the end of 2025, ahead of its original 2026 schedule.
Both facilities are expected to have an initial production capacity of 50,000 vehicles annually, with a scalability potential of up to 300,000 units based on market demand.
The EV maker is also set to establish a battery production plant in India, partnering with Chinese battery firm Gotion to set up a battery manufacturing facility in Vietnam.
“NEVER MISS AN UPDATE
Written by Cláudio Afonso | LinkedIn | X
